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Now is the time for printing companies to take charge and adopt the Total Process Approach

November 2012

For too many years printers have been in the hands of others without having the ability or the know-how to recognise their full potential as valued suppliers to the publishing industry. The world is changing and print is still in demand, just in a different way, and printers need to provide many added services.

Publishers generally deal with printed books inventory, and sometimes raw materials and printed books on consignment in warehouses. Inventory management is critical to keeping a publishing business operating smoothly and in turn producing happy customers.

A publisher's overall objectives are:

To have the correct stock levels for all titles

To create the most overall margin from book sales

To maintain the lowest inventory investment and carrying cost while achieving the 2 other objectives above

Forecasting book sales and determining the best order quantity for every book is a challenge, of course, and unfortunately publishers often respond by using the economic order quantity (EOQ). The EOQ is designed to produce a number for a print run that will minimize the combined costs of producing the book and carrying it in inventory. In other words, the EOQ balances setup costs against sales rates and carrying costs. Sounds plausible, but it has its pitfalls. It can work for a single title but pricing models make it tempting to raise the print quantity and, for obvious reasons, some printers will encourage publishers to do that.

By contrast the total process approach always focuses on those first two objectives: keep all titles available for sale and produce the most margin. When you run out of a title because you spent too much for the inventory of another title, then you lose sales and margin. You must consider the system as a whole and not simply a series of independent purchasing decisions.

Printers to manage Inventory and Distribution for Publishing Houses

Forward thinking printers, need to have the ability to think “outside the box” and no more is it prevalent than in this situation. It is becoming more and more obvious that specific warehouse storage for publications is becoming obsolete. Print on demand along with “on territory” printing for journals and publication is being produced consistently and at reasonable rates. Granted, the unit cost may be slightly higher but when taking into account the cost for storage, the benefits of smaller quantities far outweigh the costs for warehousing. This is nothing new, however now the printer can take it a stage further by providing different solutions for titles that have variable consumer demands.

Available titles should be analysed and banded according to available print production methods for example:

Best-sellers. Because it's never good to run out of a bestseller, a publisher must determine a safety stock level that will protect against fluctuations in both production and demand. Ideally, the safety stock will be almost used up as the next printing is becoming available for shipment.

Monitor best-sellers daily or weekly to determine how many days' worth of stock are held based on current or expected sales. Always have your next order scheduled near the time you expect to need it, and adjust the advance schedule with your printer every week as necessary.

High-Midlist sellers. The keys are short runs and knowing the demand rate. Now that publishers have access to sell-through information from the printer, they don't have to guess as much about the right size for second and subsequent printings that will provide inventory. Instead they can base their print orders on demonstrated demand.

Whatever the size of your print run, though, you should design your books with POD technology in mind to ensure any future transition from short run to POD is seamless.

Slow Sellers. Now that Print on Demand offers small print runs of a book at a higher per unit cost, publishers can choose to use it for slow moving backlist books. POD does have the potential of generating additional margin while creating little or no inventory.

Printers now need to gear up to providing the whole supply process, right through to dispatch. No longer should we work from the - publisher – printer – warehouse model where the publishers manage stocks of each product, greater options and choice needs to be on offer from the printer to provide a complete service.

Good printers are now diversifying their business to deliver not only print, but also a multimedia platform service. Social Media management, web on line ordering, website development, Electronic Data Interchange (EDI), these are just some services forward thinking printers are offering. The key objective however has to be to deliver a quality publication to the end user at the lowest possible cost. Printers managing stock levels, determined by the customer and having the ability to share stock information with them in real time through EDI is essential. However why not take it a stage further and have the end user order their book and pay for their book through the printer? This can be achieved in many ways through online ordering, automatically altering the stock level and taking the transaction in real time.

Less handling from process to process and creating a seamless workflow through good, sound automated systems reduces handling and cost whilst allowing the publisher to focus on the content and presentation of their publications which has to be seen as a way forward.

For further information on how Halstan can help with these services please do not hesitate to contact